Building a clean economy is half the cost of stimulus package: WWF
20 Mar 2009
Australia can successfully transform to a low carbon economy at just over half the cost the Federal Government has spent on the stimulus package in the past six months, according to a new independent report.
With Earth Hour only a week away, the report, commissioned by WWF-Australia, highlights how the country can meet its emissions targets in order to combat dangerous climate change.
The total investment required between 2010 and 2050 to deploy sufficient low-carbon energy generation to power Australia would be about AUD$28.3billion. Unfortunately, the modelling also reveals that neither the Federal Government's Carbon Pollution Reduction Scheme, or its Renewable Energy Target, will generate the amount needed to meet the required investment.
"Both schemes have been structured to minimise the cost of reducing carbon emissions instead of maximising low-carbon industry development," said report co-author Dr Karl Mallon, Director of Corporate Analysis for Climate Risk.
According to Paul Toni, WWF-Australia Program Leader for Development and Sustainability, its further evidence that Australia, despite exaggerated claims of cost by polluting industries, can make the change.
"Earth Hour shows that millions of Australians want this Government to act to battle climate change. This report shows they can. It is clearly well within our resources to put Australia on track to a low emission society but the current climate policies are falling well short," said Mr Toni.
The report presents new industrial modelling that covers Australia's major emission sectors and shows the investment costs of harnessing Australia's five untapped low-carbon energy resources (wind, bio-energy, geothermal, solar radiation, ocean power), as well as carbon capture and storage (CCS).
The cost will start at about $100 million per year in 2010, peak at $1.6 billion per year in 2019 and reduce to zero by 2050, as economies of scale take hold. However, the continuing capture and storage of carbon is likely to cost about $200 million per year in 2050. According to Dr Mallon, the results show a classic barrier to industrial transformation that need interventions to drive-up market size and unlock economies of scale.
"Low-carbon industries start small and expensive, but over time they become large and cheap. However, if government policies do not drive the expansion, then these low-carbon industries will remain small and expensive," Dr Mallon said.
"Unfortunately, the modelling shows that the climate change policy of the Federal Government offers inadequate incentive for the private sector investment to drive fundamental transformation. In addition the five per cent CPRS target by 2020 is too small and short term to drive much more than energy efficiency and increased gas use."
"The fix is relatively simple, the emission trading scheme needs to be set at a minimum of 15 per cent below 2000 levels and the Renewable Energy Target needs to specify a large minimum contribution from each of Australia's five major renewable resources," Dr Mallon said.
For more information:
Alvin Stone, WWF-Australia Press Office.
Phone: (02) 8202 1259 or mobile 0410 221 068.
The report is available here.
